Waterfall Blog

BUYING OR SELLING A BUSINESS – PART 3 OF 3: DECIDING WHAT TYPE OF SALE IS BEST AND CONSIDERING A POST-SALE PLAN

Now that you have completed some preparations, valued your business and considered proper due diligence, you must determine which type of sale is more advantageous – a stock sale (the ownership interest of your business), or an asset sale, (selling the assets of your business while ownership of the company does not change). Let’s review the advantages and disadvantages of both options.

BUYING OR SELLING A BUSINESS – PART 2 OF 3: HOW TO VALUE A BUSINESS AND DUE DILIGENCE

DETERMINING THE VALUE OF THE BUSINESS:

One of the biggest problems in business sales is the seller over-valuing the business. We’ll take a moment to consider the most common ways prices can be determined.

SOME IMPORTANT CATEGORIES OF DUE DILIGENCE:

There are many facets of the business that need to be disclosed and reviewed in order to complete the sale. Depending on the content and state of that disclosure, the buyer may be compelled to either walk away from the deal or renegotiate.

POINTS TO CONSIDER BEFORE YOU SUBSCRIBE TO A DATING SERVICE

Perusing through an airplane or local lifestyle magazine, it is common to see an ad featuring a beautiful woman who promises that she can connect you with your true love just as she has found hers. Many singles, interested in finding love but discouraged by internet dating sites and “the bar scene,” are tempted by such ads.

Basis Planning in Estate Planning

Historically, the tax planning associated with estate planning focused primarily on saving estate taxes. Now, however, such tax planning is focused more on income taxes than estate taxes. This change is driven by the fact that the current estate tax exemption is $11.18 million per person ($22.36 million for married persons).

WITHHOLDING TAX CHECKUP!

Everyone is impacted by the 2017 Tax Reform: Tax Cuts and Jobs Act. As a result of the sweeping changes in the law and subsequent related adjustments to wage and income withholding tables, April may hold an unpleasant surprise in the form of additional tax due.

Jill Wiley Wants to Help Independent Firms Grow Up With AI – An Article by Gabrielle Orum Hernandez from Legaltech News

Artificial intelligence has captured a ton of attention from huge global law firms and corporate counsel, but smaller independent firms are still finding their footing in how machine learning and other kinds of predictive coding can aid their work.

Tucson, Arizona-based attorney Jill Wiley, the newest chairwoman of the board for global law firm alliance Meritas, is looking to get independent law firms thinking about technology innovation and artificial intelligence. Wiley, also a managing partner at southern Arizona firm Waterfall, Economids, Caldwell, Hanshaw & Villamana, has set forth a priority to establish a Meritas international task force on the use of AI.

The Many Pitfalls of No-Fault Attendance Policies

The ACLU recently filed a first-of-its-kind class action lawsuit against AT&T Mobility claiming the company’s no-fault attendance policy violates the Pregnancy Discrimination Act (“PDA”). While the popularity among employers of no-fault attendance policies has grown over the years, this lawsuit illustrates why they should think twice (and consult an experienced employment lawyer) before implementing such a policy. No-fault attendance policies like the one challenged by the ACLU do not draw any distinctions among the reasons given for an employee’s absence; rather, they punish any kind of absence with points which, after a certain number, result in termination.

Do I Need A Cohabitation Agreement?

The historic case of Michelle Marvin v. Lee Marvin, 134 Cal.Rptr. 815, 557 P.2d 106 (1976), commonly referred to as the “Palimony case,” first brought to the world’s attention the rights, or lack thereof, of a cohabiting couple. In the Marvin case, Michelle Marvin filed suit against actor Lee Marvin seeking to recover her alleged contributions toward his career. Although they never married and did not enter into any type of written agreement stating that their earnings and accumulation of property would be shared or that Lee would provide any financial assistance to Michelle, Michelle claimed she was entitled to an equal ownership interest in all of the property Lee had acquired during their six year relationship. She also sought support from Lee in the nature of alimony.

Reminders for Employers Regarding Employee Rights under the AMMA

The following tips are offered for employers and employees on how to navigate Arizona’s Medical Marijuana Act (“AMMA” or “Act”), but it is important to remember that much of the statute’s meaning has not yet been interpreted by the courts. As the implementation of AMMA takes our laws into uncharted territory, little guidance exists on how courts actually would apply the Act in any given situation. It is always a good idea to consult an employment attorney should any medical marijuana issues arise in your workplace.

Arizona will soon pass a state law banning texting and driving, but that doesn’t mean it’s legal to do so until the law passes. Many local jurisdictions have enacted codes or ordinances to make it illegal not only to text while driving, but to use a phone at all while driving, unless it is being used in hands-free mode.

Be Careful What You Post: The Dangers of Social Media

Lately there has been a lot of attention given to social networking sites and the role they play in divorce. Not only are the number of relationships broken up by information posted online growing, but those postings are finding their way into the court room. Many people may be surprised to know how often pictures and posts to online sites like Facebook, Twitter, Instagram, Tumblr, Reddit, and Snap Chat are submitted as evidence at a divorce trial or custody hearing. Even with all of the attention in the media, I still have to frequently remind my clients to be very careful about what they post online, because those comments or photos can be used against you.

The Arizona Medical Marijuana Act (“AMMA”) was voted into law in 2010 and went into effect in 2012. The purpose of AMMA is to protect patients with debilitating medical conditions, as well as their physicians and providers, from arrest and prosecution if such patients engage in the medical use of marijuana. AMMA does not broadly alter the legal status of marijuana in Arizona, however; AMMA protection only extends to those who adhere to AMMA specifications, which vary for patients, caregivers, and physicians.

How to Save Your Personal Assets: 5 Self-Protection Tips for Business Owners

After years and years of careful planning and hard work, you created and are operating a successful business. Just as you begin to reap the benefits of your labor, boom – a judgment is entered against your business. Unable to pay the judgment from the business account, creditors seek to seize your personal assets – and win. The next thing you know, you are financially destitute alongside your once thriving business. You falsely thought your personal resources were protected by setting up your business. How could this have happened?

Today’s Proposed Spending Bill Protects Tipped Employees

In 2011, the Department of Labor put forth a regulation clarifying that tips are to be considered the property of the employee who earns them, and prohibiting employers from requiring tipped employees to share their tips with non-tipped employees. Courts remained split on the issue, however, with the Ninth Circuit upholding the Obama era regulation prohibiting tip sharing even if the tipped employee was paid minimum wage, and other circuits rejecting it, concluding tip sharing could be implemented by the employer if the tipped employee was paid the full minimum wage rather than the reduced tip credit wage.

The Circuit Split on LGBTQ Protections Under Title VII Just Deepened

On February 26, in Zarda v. Altitude Express,the Second Circuit (sticking a needle in the eye of the Justice Department) joined the Seventh Circuit and the EEOC in concluding that sexual orientation discrimination is sex discrimination under Title VII. The Eleventh Circuit recently held the opposite, potentially setting this issue up for Supreme Court review (eight other Circuits have held that sexual orientation is not explicitly covered by Title VII). Notwithstanding the contrary Circuit decisions, and the fact that neither the Seventh Circuit nor the Eleventh Circuit decision ended up before the Supreme Court, this issue is being litigated more and more. So I would expect it to be taken up by the Supreme Court sooner rather than later.

Brief 2018 Estate Planning Update

Many of you may know that this year is a significant year of change to the exemption levels that apply for estate, gift and generation-skipping transfer taxes. This update is a summary only. Once you have read the following update, if you have any questions about how these matters relate to you, our estate planning attorneys will be happy to schedule an office conference with you to discuss what steps (if any) would be appropriate for you to take. In addition, this may be an excellent time for you to review your individual estate plan and make any changes that are necessary.

Partnerships and LLC Audit Rules Change: Time to Revisit That Operating Agreement

New partnership audit rules impact your business by changing how the IRS audits partnership entities, increasing the burden and tax cost by shifting the tax impact from the individual partner to the partnership/LLC entity. LLC’s and partnerships may need to revisit and amend your operating agreement now due to this change in law.

While this discussion is not meant to provide all the details of the new audit procedures, some of the main changes to note are as follows:

Any adjustment to income, gain, loss, deduction, or credit will be determined, and assessed and collected at the partnership level,

Tax calculated at the partnership level is taxed at the highest tax rate applicable to the partners and charged to the current partners/members; and,

Tax Matters Partner is replaced by the Partnership Representative (“PR”).

Five Things You Can Do To Minimize Attorney’s Fees In A High-Conflict Divorce

Divorces, like marriages, come in all different styles. While few divorces are without any conflict at all (although they do exist), most divorces are medium-level conflict. This conflict stems from not only the incompatibilities that led to the dissolution, but also grief over the end of the marriage, anger at the other spouse, and deep concerns over the health and well-being of children. All of this is quite normal. Waterfall, Economidis, Caldwell, Hanshaw & Villamana, P.C., has five divorce attorneys in Tucson, Arizona with significant experience in and knowledge about how all conflict levels affect divorce proceedings and the litigation and decision-making processes.

How Howell Impacts The Division of Military Pensions in Divorces

In May 2017, the U.S. Supreme Court issued an opinion in Howell v. Howell, 137 S. Ct. 1400 (2017), reversing and remanding the judgment of the Arizona Supreme Court. In effect, the decision places important limitations on a trial court’s ability to ensure that a military retirement pay award to a former spouse is protected in the event that the military veteran accepts a disability benefit that diminishes his or her retirement pay and consequently that of the former spouse.

BACKGROUND

The case involved John Howell (Husband) and Sandra Howell (Wife), who divorced in 1991, while Husband was completing military service. The divorce decree treated Husband’s future military retirement pay (MRP) as community property and awarded Wife fifty percent of Husband’s MRP upon its commencement. Husband retired in 1992 and Wife began receiving fifty percent of the MRP. About thirteen years later, the V.A. deemed Husband to be twenty percent disabled because of service-related injuries. Husband elected to receive corresponding disability benefits and thus had to waive a portion of his MRP. This waiver reduced Wife’s award of the MRP.

3 Common Estate Planning Mistakes Parents of Young Children Make

Being a parent to young children can be exhausting between ballet and soccer practice, bath time, homework, and bedtime. It is not a surprise that most parents of young children don’t give estate planning much thought. However, parents with young children can benefit greatly from having an estate plan and the assistance of an attorney that specializes in estate planning. It is extremely common for parents with minor children to make mistakes that can affect their estate and, most importantly, their children, if something tragic and unthinkable happens to them. As an estate planning attorney and mother of a kindergartner, I understand the stress that comes with thinking about an estate plan while managing work and life, but it is an important step for all parents.

Choosing The Best Corporate Entity For Your Business

Choosing the proper structure for your business, whether you are starting a new business or changing the type of entity for an existing business, is one of the most important business decisions you will make. The two primary considerations in selecting the type of entity are usually liability protection and tax treatment. Here is a summarization of several of the business structures that are available to you in Arizona. We recommend you consult with legal and tax professionals before making a final decision as to which entity is best for you.

The Importance of Good Anti-Harassment Policies and Procedures

Your workplace is one big, happy family, right? You work and play together; you joke around; it’s all in good fun. Well, it is until it isn’t; until an EEOC complaint lands on your desk.

Each new day seems to bring new revelations about the prevalence of sexual harassment in the workplace. This great unmasking only underscores how crucial it is for employers to have comprehensive policies and staff training on identifying and preventing sexual harassment in the workplace and on appropriately and thoroughly responding to employee complaints when they arise. Not only is having good policies and complaint procedures in place a good idea from an ethical and moral standpoint, but also having robust anti-harassment policies, and implementing those policies consistently, can shield an employer from legal liability for the misdeeds of a rogue employee. Employers should consider several components when creating and implementing sexual harassment policies and procedures: